MPC member speaks up for rate cut

Bank of England deputy governor Sir John Gieve has spoken out in favour of cutting interest rates.

In a speech at the London Chamber of Commerce today he set about building the case for a rate cut based on the effects the credit crunch were having on the UK economy.

He said: "The case for easing [lowering the base rate] has been greatly strengthened by the disruption in global credit markets and in our own banking system which brings a risk of a deeper downturn."

Sir John warned that the potential stumbling block would be the possibility of higher inflation this year.

Howard Archer, chief economist at Global Insight, responded to the speech by suggesting that it was likely the deputy governor had voted for a rate cut in this month's monetary policy committee (MPC) meeting.

Minutes of the meeting, which will reveal how each of the nine MPC members voted, will be published on January 23rd.


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